Smith v Luhrs
[2012] QCAT 52
•30 January 2012
| CITATION: | Smith v Luhrs [2012] QCAT 52 |
| PARTIES: | Ms Angelique Smith (Stankiewicz) |
| v | |
| Mr Jason Luhrs t/a JL Quality Homes |
| APPLICATION NUMBER: | BDL307-10 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 3 November 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Mr Andrew McLean Williams, Member |
| DELIVERED ON: | 30 January 2012 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | I order that the respondent pay to the applicant the sum of $872.28 within 28 days. |
| CATCHWORDS: | Residential Building Dispute – contract variations by way of reduction in scope of works – whether builder’s margin and GST should be credited to home owner as part of those variations – method for calculation of variations that reduce scope of works |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Ms Angelique Smith (Stankiewicz), in person |
| RESPONDENT: | Mr Jason Luhrs T/A ‘JL Quality Homes’, in person |
REASONS FOR DECISION
On 21 October 2009 Ms Angelique Stankiewicz (now Smith) entered into a Minor Works Contract with JL Quality Homes. JL Quality Homes is the trading name for Mr Jason Luhrs, who is a Queensland Building Services Authority (‘QBSA’) registered builder, licence number 1004896.
The minor works contract was originally in the sum of $124,000.00, and required the respondent to build in the ground floor, beneath a high-set dwelling located at 51 Weston Street, Zillmere, 4034. Item 11 of the Minor Works Contract specified the commencement date as being “as soon as possible”, yet 27 October 2009 was later written underneath that as the commencement date. Initially, the date set for practical completion was agreed to be 17 December 2009. Ultimately however, practical completion was not achieved until 14 March 2011, primarily because of delays in the builder receiving progress payments from the applicant.
On 28 September 2010 Ms Smith commenced her claim before QCAT in her former name of Stankiewicz, seeking payment of $36,563.00 from the respondent together with her QCAT filing fee of $255.00 (total claim $36,818.00).
A claim in this sum has not been pressed by the applicant during the hearing conducted on 3 November 2011. The applicant’s specific submissions on the day of the hearing related to a claim of no more than $13,237.90. In addition, the applicant also continues to assert that GST was charged to her under the contract twice, and that there were also difficulties with in the manner in which the builder’s margin had been calculated by the respondent, on contract variations.
Before dealing with the more specific matters that were raised by the applicant, I will deal with the argument that the applicant was charged twice for GST. Upon close examination of all of the materials put before me I can find no satisfactory evidence of that having occurred. Indeed, the applicant has produced no actual evidence that she has been overcharged for GST, other than to point to the respondent’s own documents as affording the proof for her contention in that regard.
The respondent uses a computer program for the purposes of preparing contract estimates (“SoloAssist Quoting and Job Management”). Copies of the document prepared by means of this computer program were provided to the applicant at the start of the job. During evidence, Mr Luhrs explained – in what I thought to be entirely satisfactory terms – the manner in which that computer program operates, and, in particular, the way in which both builder’s margin (set at 12.7%) and GST is shown at the very end of the spreadsheet as separate items, hence giving the cursory appearance that it may have been charged twice, by reason that it also appears in the body of the spreadsheet, as well. Mr Luhrs explained that the software only includes builder’s margin and GST once when the total job price is calculated. I am satisfied that there is nothing untoward here, and that there is no acceptable evidence that might enable me to conclude that the applicant has been charged twice for GST.
Ultimately, the applicant’s claim fell to be determined under a number of items. These were:
§ The cost of paint supplied by the owner;
§ Costs associated with windows;
§ Electrical charges;
§ Additional costs associated with the construction of a wall to hold the electrical fuse box;
§ Costs associated with tiles supplied by the owner;
§ Costs associated with the supply, by the owner, of toilet roll holders, towel rails, etc;
§ Costs associated with mirrors supplied by the owner;
§ Variations for shower screens;
§ Earthworks;
§ Master Builders’ insurance claim excess and costs associated with certification.
The cost of paint supplied by the owner
As part of their agreement, the applicant Ms Smith arranged to provide the paint that was to be used in the final stages of construction. This had been stored on site, yet over the Christmas vacation period there was a break-in, and the paint (together with some other items) was stolen. Mr Luhrs later made an insurance claim, and the costs of that paint was covered by that insurance. Mr Luhrs had agreed to reimburse the applicant for the paint, yet to date this has not occurred. Mr Luhrs admits that $167.92 is owed to Ms Smith for paint, and that he has not yet reimbursed the applicant for this. Accordingly I will allow this item from the applicant’s claim, being paint in the sum of $167.92.
Costs associated with windows
Windows and doors were sourced by the builder from a firm of joiners at Brendale and a provisional sum (‘PS’) allowance was made for this in the contract. Ultimately, those that were selected by Ms Smith were less than the PS allowance, as initially the contract had specified for double-hung windows, yet cheaper, sliding windows were selected by Ms Smith.
Although Ms Smith contends that she is now entitled to $2,694.00 in relation to this variation, there is a signed variation (Variation 15) that indicates that the agreed reduction amount is only $800.00. In his evidence, the respondent Mr Luhrs said that this sum has already been reimbursed to Ms Smith. I accept that evidence, and accordingly will not allow any further sum for windows.
Electrical Charges
The applicant’s claim for electrical items is really advanced in two parts. Firstly, Ms Smith contends that she was charged $374.00 as a cost passed on to her by the builder from the electrician, in circumstances in which the electrician “had to fix his own job” (meaning that Ms Smith should not be responsible for an error by the electrician). Secondly, Ms Smith contends that she should have been reimbursed a far greater sum for a reduction in the scope of electrical works than was allowed to her by Variation 16, which had returned to her the sum of $3,626.00. Ms Smith says that an additional $1,282.00 should have been returned to her, beyond that sum, when the scope of electrical works was reduced by her.
Firstly, in relation to the additional charge of $374.00, Mr Luhrs submitted that pursuant to the contract it was Ms Smith’s responsibility to ensure that there was always power on-site. However, on the day of his commencement there was no power, and Ms Smith had gone away overseas on her honeymoon. Mr Luhrs says that when he managed to contact Ms Smith about this she instructed him to make any necessary arrangements to re-establish electrical power, which he did. Mr Luhrs says that these extra costs were covered off in Variation 3. As part of the process of establishing temporary power Mr Luhrs explained that his electrician had to disconnect the power to the unoccupied upper floor, for safety reasons. Then, sometime later, when the owner requested that the upstairs power be re-connected, the electrician had to return to site. It was the electrician’s return visit to site that resulted in the additional $374.00 invoice. I am satisfied that this charge was reasonably incurred, and did not arise as the result of any error by the electrician. The need for it arose by reason of the failure by the applicant to have power on site when the builder commenced his work. It is a cost that must now be borne by the applicant.
Mr Luhrs also explained that initially, the contract had made a PS allowance of $4,000.00 for electrical works. However, sometime after variation 3 (when the additional charges caused by Ms Smith failing to ensure that the site had power were claimed), Ms Smith also decided to make her own arrangements for electrical works; such that Mr Luhrs then credited the $4,000.00 PS amount to Ms Smith, less $374.00 that was required to meet the additional invoice from the electrician to reconnect the power, upstairs. Hence, so Mr Luhrs says, that only $3,626.00 was refunded to Ms Smith by means of Variation 16. As an afterthought during this part of argument Ms Smith contended that there had been no written agreement in relation to this additional $374.00 charge, and hence the builder cannot claim for it. Although it may be strictly true that there was no written variation in relation to this specific invoice, I am satisfied that there was not the need for any specific written variation as regards this charge. Variation 16 sufficiently covers that $374 invoice. In all events, I am satisfied that the sum claimed is reasonable, when assessed on a quantum meruit basis. I therefore allow the builder to claim that sum and find that there is no basis upon which Ms Smith can now claim that she should now be reimbursed this sum of $374.00.
As to the second component of the electrical charges, Ms Smith also claims $1,282.00 over and beyond that returned to her by means of Variation 16. It would seem that her basis for so arguing is that pursuant to the contract, a PS allowance of $4,000.00 had been allowed and to that would then ordinarily be added 10% GST, and builder’s margin, set at 12.7%. As I understand her logic, the $4,000.00 plus profit amounts to $4,508.00, to which is then added the $400.00 GST, making for a total of $4,908.00. Because only $3,626.00 was returned to her by means of Variation 16, her argument is that $1,282.00 is still to be returned to her. Yet, I cannot accept the fallacious reasoning that underpins that argument. If it were to be accepted, then Ms Smith would derive a windfall benefit at the expense of the builder. Pursuant to the contract a PS allowance was made. That is to say the contract made a notional allowance in the overall contract price of $4,000.00 for electrical works, and when this notional sum was not expended, it was then credited back to the owner, by the builder. No GST or profit was payable on the sum returned, because it was never actually expended. Because Ms Smith never actually paid either GST or builder’s margin over to Mr Luhrs on the $4,000 electrical PS allowance, it cannot be returned to her.
Additional costs associated with the construction of a wall to hold the fuse box
An additional $505.00 was claimed by the respondent for the costs of building a partition wall to hold the electrical fuse box. The applicant complains that the wall where the fuse box is located was always going to be part of the permanent construction and comprised part of the contract, and hence must now form part of the original contract price. In response, the respondent explained that as a result of the applicant’s failure to provide power on site at the commencement of the project he was required to construct a temporary stud wall, in order to afford the electrician with a location to place the fuse box; and this was constructed by him out of sequence with the scheme of construction, and this caused additional unforseen labour costs, as well as the need for some extra materials.
During evidence at the hearing on 3 November 2011, Mr Luhrs did however concede that the temporary wall for the temporary fuse box was constructed using ordinary timber studs, and these were taken from the stock that had already been allocated by him for this project, such that there may have been some minor double counting as regards his use of materials for the temporary wall to hold the meter box. I am satisfied that there would have been additional labour costs involved in having to erect the temporary partition wall to hold the meter box. Although the total sum claimed is $505.00, I will reduce this by $50.00 on the basis of the concession given by Mr Luhrs in evidence in relation to the use of materials. I allow therefore the sum of $50.00 in relation to this head of claim.
Costs associated with tiles supplied by the owner
Pursuant to the contract tiles were a prime cost (‘PC’) item. Ultimately the tiles were provided by the applicant herself, such that a variation was effected reimbursing the PC sum to the owner. This was achieved by means of Variation 20. The PC allowance was $1,182.50, and that sum was reimbursed to the owner. In a manner similar to her argument raised in relation to the electrical variation, that applicant complains that in addition to that sum she should also receive a return of the GST and profit on $1,182.50. For reasons consistent with my rejection of her argument as regards the electrical claim I do not accept that the applicant is entitled to the GST or builder’s margin on the PC allowance for tiles, either.
Supply by the owner of toilet roll holders and towel rails
Pursuant to the contract the builder was originally to supply and install toilet roll holders, and towel rails. Ultimately the applicant chose to supply and install these items herself. The PC item allowance for these was $170.36 for labour. Because these were supplied and installed by the owner, the sum of $170.36 should now be returned to the owner. The Respondent builder concedes as much.
Mirrors supplied by the owner
The applicant also says that she supplied her own mirrors. There were three of these, valued at $150.00 each. The applicant now claims $450.00 together with builder’s margin at 12.7% and GST making for a total claim of $552.00. In his evidence, the respondent says that the applicant was never charged for mirrors and hence there is no basis for returning this sum to her. I accept the builder’s evidence.
Shower Screens
The applicant says that $1,138.00 should be returned to her by reason that the builder charged her $2,674.85, yet the provisional sum item in the contract for these shower screens was only $1,536.70. I am satisfied that any provisional sum or prime cost items that should have been returned to the owner by the builder in relation to this item have taken place. Accordingly I don’t allow this claim item, either.
Installation of skirting boards
The applicant chose to install a timber floating floor and requested that the builder not install the skirting boards. These were later installed by the owner herself, once the floating floor had been installed. The applicant now claims $191.40 for this item. Yet the builder in his evidence testified that this sum had already been returned to the owner, as part of Variation 17. I accept the builder’s evidence, and do not allow any claim under this head.
Earthworks
As part of her claim the applicant says that she was charged for earthworks in circumstances where no earthworks were necessary. In evidence the builder was able to show to my complete satisfaction that earthworks had been performed by him. I therefore reject the contention that an unnecessary sum of approximately $5,000.00 had been charged by the builder to the applicant for earthworks.
Master Builders’ insurance claim excess and costs associated with certification
The applicant also claims that she was charged too much for the excess on the Master Builders’ insurance claim, which was only $200.00, yet she was charged $275.00 by Variation 22. In addition, the applicant claims that she was charged for the cost of having certifiers and engineers attend to certify various stages in the construction a total of $484.00, yet in circumstances where this was included in the original contract price.
No evidence has been put before me that shows that the applicant was charged an additional $75.00 for the costs of the insurance claim against the QBSA insurance scheme, such that I do not allow the $75.00 that has been claimed for this item.
In relation to the additional $484.00 that the applicant contends she was charged for having engineers and private certifiers provide certificates, it would seem that the contract does provide that certification/approvals are an included part of the total contract price. There are certainly invoices that have been issued to the applicant from the ‘Brisbane Certification Group’ and from ‘Structerre Consulting Engineers’, and these have been marked as paid, in the applicant’s handwriting. I find therefore that $484.00 ought not to have been included as part of the contract price paid by the applicant and I will now allow the claim by her in the sum of $484.00.
In summary therefore, I find that the applicant is entitled to judgment in the sum of $872.28. Having considered the question of costs, I think it appropriate that there be no order as to costs.
Order
I order that the respondent pay to the applicant the sum of $872.28 within 28 days.
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